Certificates Of Merit For NC Lawsuits Against Engineers And Architects? (Still No)(Law Note)
April 22, 2019 —
Melissa Dewey Brumback - Construction Law in North CarolinaCertificates of Merit are documents intended to show that a true issue exists with a professional’s work, prior to that person being sued. While North Carolina does require that a person suing a medical provider first have the matter reviewed by a professional (and attest to that in the Complaint), there is no requirement for any review prior to a lawsuit against an architect, engineer, or surveyor. Thus, anyone can file a lawsuit against an engineer/architect/surveyor without first having their case eyeballed reviewed by another professional.
Over the years, there have been attempts at adding a Certificate of Merit requirement to design professional lawsuits. See, for example, examples here: from
2005; from
2007; from
2011; and from
2013.
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Melissa Dewey Brumback, Ragsdale Liggett PLLCMs. Brumback may be contacted at
mbrumback@rl-law.com
California Supreme Court Upholds Precondemnation Procedures
September 22, 2016 —
Patrick J. Paul – Snell & Wilmer Real Estate Litigation BlogOn July 21, 2016, the California Supreme Court in Property Reserve v. Superior Court upheld the state’s precondemnation entry and testing statutes provided they were reformed to allow impacted property owners the ability to have a jury trial to determine damages associated with such entry and testing.
The California Department of Water Resources (DWR) sought to construct water conveyance facilities that would require significant property condemnation. As part of this process, DWR further sought to investigate the environmental and geological suitability of more than 150 private properties considered for the conveyance route.
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Patrick J. Paul, Snell & Wilmer Mr. Paul may be contacted at
ppaul@swlaw.com
Limiting Plaintiffs’ Claims to a Cause of Action for Violation of SB-800
November 18, 2011 —
Samir R. Patel, Esq., Lorber, Greenfield, & Polito, LLPThere has been a fair share of publicity about the SB-800 amendments to the Civil Code (Civil Code section 896, et seq.) that codified construction defect litigation in 2002. Most of the publicity is geared toward the pre-litigation standards allowing a builder the right to repair before litigation is commenced by a homeowner. Less focus and attention has been given to the fact that violation of the SB-800 performance standards is being used by plaintiff’s counsel as an additional tool in the plaintiff’s pleading tool box against builders. Closer scrutiny to SB-800 reveals that those provisions should in fact act as a limitation to the pleading tools available to plaintiffs and an additional tool for builders in the defense of cases governed by SB-800.
The typical construction defect complaint contains the boiler plate versions of numerous causes of action. These causes of action include Strict Liability, Negligence, Negligence Per Se, Breach of Contract, Breach of Contract – Third-Party Beneficiary, Breach of Express Warranties, Breach of Implied Warranties, among others. The wide array of causes of action leave a defendant “pinned to the wall” because they require a complex defense on a multitude of contract and tort related causes of action. Furthermore, the statutes of limitations as to these claims widely differ depending upon if the particular defect is considered latent or patent. The truth of the matter remains, no matter what the circumstances, if a construction defect matter ultimately goes to trial, it is inevitable that plaintiffs will obtain a judgment on at least one of these causes of action.
On its own, the Strict Liability cause of action can be a thorn in a defendant’s side. A builder is obviously placing a product into the stream of commerce and strict liability is a tough standard to defend against, particularly when it concerns intricate homes comprised of multiple components that originally sold for hundreds of thousands of dollars. A Negligence cause of action can also be difficult to defend because the duty of care for a builder is what a “reasonable” builder would have done under the circumstances. An interpretation of this duty of care can easily sway a jury that will almost always consist of sympathetic homeowners. A Negligence Per Se cause of action can also leave a defendant vulnerable to accusations that a builder violated the Uniform Building Code or a multitude of other obscure municipal construction-related code provisions during the construction of the home. Lastly, the Breach of Contract cause of action leaves a builder relying on dense and intricate purchase and sale agreements with dozens of addenda which leave the skeptical jurors turned off by what they view as one-side, boilerplate provisions. Ultimately, when a matter is about to go to trial, the complexity of these complaints can benefit a plaintiff and increase a plaintiff’s bargaining power against a defendant who is attempting to avoid a potentially large judgment.
Enter the SB-800 statutes. The SB-800 statutes apply to all homes sold after January 1, 2003. Civil Code section 938 specifically states that “[t]his title applies only to new residential units where the purchase agreements with the buyer was signed by the seller on or after January 1, 2003.” (Civil Code §, 938.) As time progresses, more residential construction defect cases will exclusively fall under the purview of SB-800. Slowly but surely more SB-800 governed litigation is being filed, and its exclusive application is looming on the horizon.
On its surface, this “right to repair” regime has left builders with a lot to be desired despite the fact that it is supposed to allow the builder the opportunity to cure any deficiencies in their product before litigation can be filed by potential plaintiffs. However, the application of the time line for repair has shown to be impractical for anything but the most minor problems involving only small numbers of residential units. Moreover, the fact that the fruits of the builder’s investigation into the claimed defects in the pre-litigation context can freely be used as evidence against it in litigation makes builders proceed with trepidation in responding with a repair. For these reasons, more SB-800 litigation can be expected to result due to the shortcomings of the pre-litigation procedures, and savvy defense counsel should anticipate the issues to be dealt with in presenting the defense of such cases at trial.
This fact should not necessarily be met with fear or disdain. Within the SB-800 statutes, the legislature made it clear that they were creating a new cause of action for construction defect claims, but it further made it clear that this cause of action is a plaintiff’s exclusive remedy. The legislature giveth, but at the same time, the legislature taketh away. Throughout numerous provisions within the SB-800 statutes, the Civil Code states that claims for construction defects as to residential construction are exclusively governed by the Civil Code, and that the Civil Code governs any and all litigation arising under breaches of these provisions. Civil Code section 896 specifically states:
In any action seeking recovery of damages arising out of, or related to deficiencies in, the residential construction … the claimant’s claims or causes of action shall be limited to violation of, the following standards, except as specifically set forth in this title. (Civil Code §, 896.)
Civil Code section 896 then provides approximately fifty-plus standards by which a construction defect claim is assessed under that provision. Civil Code section 896 covers everything from plumbing to windows, and from foundations to decks, and in several instances expressly dictates statutes of limitations as to specific areas of construction that severely truncate the 10-year latent damage limitations period. As for any construction deficiencies that are not enumerated within Civil Code section 896, Civil Code section 897 explicitly defines the intent of the standards and provides a method to assess deficiencies that are not addressed in Civil Code section 896. Civil Code section 897 states:
Intent of Standards
The standards set forth in this chapter are intended to address every function or component of a structure. To the extent that a function or component of a structure is not addressed by these standards, it shall be actionable if it causes damage. (Civil Code §, 897.)
Therefore, Civil Code section 897 acts as a catch-all by which defects that are not covered within Civil Code section 896 can be evaluated on a damage standard mirroring the Aas case (damages must be present and actual). The result of sections 896 and 897 being read in combination is a comprehensive, all-inclusive set of performance standards by which any defect raised by Plaintiffs can be evaluated and resolved under a single SB-800 based cause of action.
Civil Code section 943 makes clear that a cause of action for violation of SB-800 performance standards is a plaintiff’s sole remedy for a residential construction defect action. Specifically, Civil Code section 943 states:
Except as provided in this title, no other cause of action for a claim covered by this title or for damages recoverable under 944 is allowed. In addition to the rights under this title, this title does not apply to any action by a claimant to enforce a contract or express contractual provision, or any action for fraud, personal injury, or violation of a statute. (Civil Code §, 943.)
Civil Code section 944 provides the method for computing damages within a construction defect action, as follows:
If a claim for damages is made under this title, the homeowner is only entitled to damages for the reasonable value of repairing any violation of the standards set forth in this title, [and] the reasonable cost of repairing any damages caused by the repair efforts… . (Civil Code §, 944.)
A cursory review of these statutes yields the conclusion that the legislature was attempting to create an exclusive cause of action that trumps all other causes of action where SB-800 applies. The remedy available to plaintiffs is limited to that allowed by the Civil Code. As noted above, “[n]o other cause of action for a claim covered by this title…is allowed.” (Civil Code §, 943.) Therefore, Civil Code sections 896, 897, 943, and 944 specifically prohibit the contract-based and tort-based causes of action typically pled by plaintiffs.
Plaintiff’s counsel has seized upon the language of section 943 to advance the argument that SB-800 still allows a plaintiff to advance typical contract and tort based causes of action. On the surface, this argument may seem compelling, but a minimum of scrutiny of the express language of section 943 dispels this notion. Section 943 says that it provides rights “[i]n addition” to those under the SB-800 Civil Code provisions. Clearly, the language in section 943 is intended to expressly underscore the fact that a plaintiff is not precluded from seeking relief in addition to that allowed under SB-800 for damages not arising from a breach of the SB-800 standards or for damages in addition to those recoverable under Section 944. This language does not provide an unfettered license to bring a Strict Liability, Negligence or other cause of action against a builder where SB-800 applies.
In fact, this language only keeps the door open for plaintiffs to pursue such causes of action not arising from a breach of the SB-800 standards should there be such supporting allegations. For example, if a plaintiff alleges that a builder breached an “express contractual provision” related to the timing of the completion of the home and close of escrow, and the contract specifies damages in this regard, a plaintiff may have a viable separate cause of action for Breach of Contract for recovery of those damages precisely because that is not an issue expressly dealt with in SB-800 in the performance standards under sections 896 and 897, or in the damage recovery terms under 944. As it stands, the vast majority of complaints are seeking redress for violation of the same primary right; that is, defects specifically outlined in Section 896 and 897 or which result in damages as stated in Section 944.
So, how does a builder defend against a complaint that contains multiple causes of action regarding construction defects for a home sold after January 1, 2003? There are numerous ways to approach this. First and foremost, these superfluous and improper causes of action can be attacked by demurrer seeking dismissal of all causes of action other than the cause of action alleging violation of SB-800. If the the time period within which to file a demurrer has passed already, a motion for judgment on the pleadings can be utilized to attack the improper causes of action in the same way as a demurrer can be used for this purpose.
The limitation to a demurrer or motion for judgment on the pleadings is that the judge is restricted to viewing only the four corners of the pleading when making a ruling. It is typical for plaintiffs’ counsel to cleverly (or one might even say, disingenuously) leave the complaint purposely vague to avoid a successful defense attack on the pleadings by not including the original date the residence was sold. In that instance, a motion for summary adjudication can be used to attack a plaintiff’s complaint. By simply providing evidence that the homes were originally sold after January 1, 2003, the improper causes of action should be subject to dismissal by summary adjudication. If the plaintiff is a subsequent purchaser, the builder still has recourse to enforce the pleading limitations under SB-800. Civil Code section 945 states that “[t]he provisions, standards, rights, and obligations set forth in this title are binding upon all original purchasers and their successors-in-interest.” (Civil Code §, 945.)
Attacking a plaintiff’s complaint to eliminate multiple causes of action can have numerous benefits. The practical result is that a plaintiff will only have one viable cause of action. The advantage is that the SB-800 performance standards include the defined performance standards and shortened statutes of limitations periods with regard to specific issues. Furthermore, as to defects which are not specifically provided for in Civil Code section 896, Civil Code section 897 requires a proof of actual damages. Therefore, a plaintiff must provide evidence of current damages and not simply conditions that may potentially cause damage in the future.
The Appellate Courts have yet to directly address and interpret these SB-800 provisions. The time for that is undoubtedly drawing near. For now, however, plaintiffs will have to find ways to accurately plead construction defect claims within the confines of one cause of action for breach of the performance standards enumerated within the Civil Code.
Printed courtesy of Lorber, Greenfield & Polito, LLP. Mr. Patel can be contacted at spatel@lorberlaw.com and Mr. Verbick at tverbick@lorberlaw.com.
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Local Government’s Claims on Developer Bonds Dismissed for Failure to Pursue Administrative Remedies
March 22, 2017 —
David R. Cook - Autry, Hanrahan, Hall & Cook, LLPThe Georgia Court of Appeals recently affirmed a trial court’s dismissal of a county’s claim on developer bonds based on its failure to exhaust administrative remedies. Douglas County v. Hamilton State Bank, — Ga. App. –, A16A1708 (Mar. 16, 2017). Specifically, because the bank was under FDIC receivership, the County was required to pursue administrative remedies under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (the “Act”).
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David R. Cook, Autry, Hanrahan, Hall & Cook, LLPMr. Cook may be contacted at
cook@ahclaw.com
OSHA Again Pushes Back Record-Keeping Rule Deadline
November 30, 2017 —
Tom Ichniowski - Engineering News-RecordThe federal Occupational Safety and Health Administration is extending again—this time, by two weeks—the compliance date for its rule requiring companies to file annual electronic reports of workplace injuries and illnesses.
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Tom Ichniowski, ENRMr. Ichniowski may be contacted at
ichniowskit@enr.com
California Supreme Court Clarifies Deadline to File Anti-SLAPP Motions in Light of Amended Pleadings
July 02, 2018 —
Tony Carucci - Snell & Wilmer Real Estate Litigation BlogCalifornia’s “anti-SLAPP” (“SLAPP” is an acronym for strategic lawsuit against public participation) statute—codified at California Code of Civil Procedure section 425.16 et seq.—is the primary vehicle for defending against any action involving petitioning or free speech. The statute was designed to provide an early and fast summary judgment-like procedure to allow defendants and cross-defendants to file a motion to dismiss either an entire complaint, specific causes of action, or even just portions of a cause of action, and to require the plaintiff to respond before conducting discovery. By facilitating an early challenge to a plaintiff or cross-complainant’s claims, the anti-SLAPP statute allows the responding party to avoid the costs and delay that chill the exercise of constitutionally protected rights.
Under California Code of Civil Procedure section 425.16(f), an anti-SLAPP motion must be filed “within 60 days of the service of the complaint . . . .” But what if the plaintiff files an ameded complaint? In Newport Harbor Ventures, LLC v. Morris Cerullo World Evangelism (2018) 4 Cal.5th 637, the California Supreme Court held that the 60-day timeline runs from the date a complaint is filed with the cause(s) of action challenged in the anti-SLAPP motion.
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Tony Carucci, Snell & WilmerMr. Carucci may be contacted at
acarucci@swlaw.com
Deck Police - The New Mandate for HOA's Takes Safety to the Next Level
November 18, 2019 —
Joseph Ferrentino – Newmeyer DillionA recent California law will hold homeowners’ associations accountable for the safety of their decks. SB326 now mandates all homeowners' associations to have decks inspected at least once every nine years by an architect or structural engineer to determine whether the decks are safe and waterproof. This law (Civil Code section 5551) follows SB721 which was passed in 2018 and requires a similar inspection every six years for other multifamily dwelling units. Failure to comply can result in paying the enforcement costs of local building agencies.
DETAILS ON THE MANDATE:
More specifically, the 2019 law requires inspections of wood “decks, balconies, stairways, and their railings” more than six feet off of the ground and designed for human use. Additionally, the engineer or architect must (1) certify that he or she has inspected for safety and waterproofing, and (2) certify the remaining useful life of the system. Further, the inspector must inspect a random sample of enough units to provide 95% confidence that “the results are reflective of the whole.” In other words, in addition to the inspector, the association will have to hire a statistician.
The nine-year timetable for inspection is no coincidence. After all, the statute of limitations for construction defects is ten years. In fact, associations are required to give notice to their members before filing a suit against a builder. However, under the new law, the association can delay giving notice to its members “if the association has reason to believe that the statute of limitations will expire.” Also, recent case law held that builders could add requirements to CC&R’s to limit a board’s authority to file lawsuits – i.e. adding a supermajority vote by members. Under SB326, any such provisions are now void. Hence, “supermajority” voting provisions are now invalid.
IMPACT ON CONSTRUCTION LITIGATION
These recent laws are clearly a reaction to the tragic collapse of an apartment balcony in Berkley in 2015 that resulted in the death of six college students. While it is imperative that decks be structurally safe, the requirements of SB326 will fuel more construction defect litigation.
Joseph Ferrentino is a Partner in Newmeyer Dillion's Newport Beach office. With 25 years of experience, Joe guides clients through construction law issues, among other areas. For more information on how Joe can help, contact him at joe.ferrentino@ndlf.com
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House Committee Kills Colorado's 2015 Attainable Housing Bill
May 07, 2015 —
Derek Lindenschmidt – Higgins, Hopkins, McLain & Roswell, LLCSenate Bill 177, the Colorado housing community’s effort to reinvigorate the construction of attainable multi-family housing and quell construction defect lawsuits, was killed by the House State, Veterans and Military Affairs Committee on Monday evening on a party-line vote. Although the bill received significant bipartisan support in the Senate, a broad coalition of municipalities, builders, contractors, and non-profit organizations was unable to convince a pre-determined “kill” committee of the merits and benefits of the bill.
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Derek Lindenschmidt, Higgins, Hopkins, McLain & Roswell, LLCMr. Lindenschmidt may be contacted at
lindenschmidt@hhmrlaw.com
